ABC MELBOURNE DRIVE
THURSDAY, 15 MARCH 2018
SUBJECT: Dividend imputation reform.
RAF EPSTEIN: Andrew Leigh, he is Labor’s Shadow Assistant Treasurer. He’s one of the local MPs in the ACT as well. Andrew Leigh, good afternoon.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good afternoon, Raf. How are you?
EPSTEIN: I’m good. Look, you’re raising a fair bit of revenue over a decade - $59 billion. Can you do that without hurting people who can’t afford it?
LEIGH: Raf, if you look at the way in which dividend refundability goes, about half of the benefits which are going to self-managed super funds are going to people with more than two and a half million dollars in their superannuation accounts. I don’t think the Australian Tax Office was ever designed to be an ATM for multimillionaires, to be writing cheques out to people who have very healthy superannuation accounts-
EPSTEIN: Can I stop you there, Andrew Leigh. Is that publicly available information, that half of the cash is going to people with a super balance of more than $2.5 million?
LEIGH: Yes, that’s the analysis that we’ve got of the benefits going to people with self-managed superannuation funds-
EPSTEIN: So where’s the analysis come from?
LEIGH: That’s the analysis that’s been done for us by a range of people, including the Parliamentary Budget Office.Read more
MORRISON’S PREMATURE PRONOUNCEMENT
Scott Morrison has pounced on an interim consumer watchdog report into whether the Turnbull Government’s Bank Levy is being passed on through higher mortgage rates.
The report looks at the first 90 days of the levy’s operation.
Mr Morrison was quick to claim victory, claiming that the levy was not passed on to consumers.
As the Australian Competition and Consumer Commission states:
However, this does not necessarily mean that the Inquiry Banks have not changed prices for other products in response to the Major Bank Levy
ACCC, Residential mortgage price inquiry interim report page 44Read more
MORRISON AIMS AT LABOR, SHOOTS OWN FOOT
The Treasurer has once again flubbed his attack, this time on Labor’s Australian Investment Guarantee:
Our policy is even better – at the moment, you get to write off the entire $20,000.
Sky News, 14 March, 2018.
Actually, a $20,000 investment by a small business is precisely an example of what cannot be claimed under the government’s current scheme.
In regards to Labor’s policy, Morrison goes on:
My understanding it is $20,000.
When pressed that Labor’s policy extends beyond a $20,000 threshold he says:
No, it’s not. It’s not!
That’s also not true.Read more
JIM CHALMERS MP, SHADOW MINISTER FOR FINANCE
ANDREW LEIGH MP, SHADOW ASSISTANT TREASURER
CORMANN THINKS BILLIONS OF DOLLARS NOT 'THAT MUCH AT ALL'
Just when you thought the Liberals couldn't get more out of touch, the Finance Minister declares that billions of dollars isn't a lot of money.
Mathias Cormann was asked on 2GB about the “blowout” associated with the cash refundability of imputation credits:
DEBORAH KNIGHT: So you are happy with the fact that it is costing the economy that much?
MATHIAS CORMANN: It is not costing the economy that much at all.
(Nights on 2GB, 13 March 2018)Read more
6PR PERTH LIVE
TUESDAY, 13 MARCH 2018
SUBJECT: Dividend imputation reform.
GARETH PARKER: Labor’s Shadow Assistant Treasurer is Andrew Leigh, he joins me on the line. Good morning, Andrew.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: G’day, Gareth. How are you?
PARKER: I’m well. What’s this about?
LEIGH: The change is to remove an unsustainable tax concession that was implemented in 2000. As you know, dividend imputation goes back to Paul Keating’s decision in 1987 to ensure that company profits weren’t taxed twice. So you’ve got a credit for the taxes that the company had already paid. But there was no cash refund that was part of that system and no other advanced country has cash refunds for imputation. What happened in the year 2000 was with a structural budget surplus of about 1 to 2 per cent of GDP, John Howard and Peter Costello decided to create a system in which cash refunds went to people where their tax liability was zero. So you actually have the ATO cutting tax cheques to tax payers – something quite unusual and something that only affects a small fraction of tax payers.
PARKER: But the tax has already been paid, hasn’t it? That’s the reality. The tax has already been paid on the profits by the company and for some time it has been a strategy of people - some self-funded superannuants, also some pensioners too – which means they get a cash flow from this feature of the tax system.
LEIGH: It’s certainly true that people have structured their affairs so as to take advantage of this. I think that’s part of the reason why when it was introduced it cost the budget half a billion dollars a year. Now it costs the budget about $5 billion a year, ten times more, and it’s projected to soon go to $8 billion. That’s more than the Commonwealth Government spends on public schools. So it’s a huge amount of money which is going through this unique Australian tax concession. Like I said, no other advanced country does things this way and for good reason.Read more
MORRISON IN A MUDDLE
Today, a panicked Scott Morrison told Fairfax “the government has never entertained” changes to cash back on the dividend imputation.
But the Government’s own Re:think Tax Discussion paper (p.92) states:
There are some revenue concerns with the refundability of imputation credits.
In its haste to yet again defend inequitable tax breaks, the Turnbull Government can’t even remember what it was saying yesterday.
TUESDAY, 13 MARCH 2018
SKY AM AGENDA
TUESDAY, 13 MARCH 2018
SUBJECTS: Dividend imputation reform.
KIERAN GILBERT: Welcome back to the program. With me now the Shadow Assistant Treasurer, Andrew Leigh. Thanks very much for your time. What do you think of the Government's argument that this is a double tax grab, that it's a distortion of the dividend imputation system now where some people will be double taxed and others won't be?
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Kieran it's worth taking a step back just to explain how we got here. In 1987 Paul Keating put in place dividend imputation which ensured that people weren't taxed twice, that individuals got a credit for company taxes previously paid. But then in 2000, a time when there was a structural budget surplus of 1-2 per cent of GDP, John Howard and Peter Costello decided to make that refundable. They put in place a system no other country in the advanced world has in which the tax office would cut you a cheque.
GILBERT: What's wrong with that?
LEIGH: Well it's pretty unsustainable at a time when we have the budget deficit now soaring. It's eight times larger than when it was forecast. Gross debt just crashed through the half a trillion dollar barrier and the Turnbull Government is saying we should be taking money away from pensioners - saying that these payments aren't affordable. I think if we're looking at cheques the Government cuts, we probably should look first to the cheques that it's cutting to people who are not paying tax but instead getting cash refunds for dividend imputations.
GILBERT: Your former boss, Peter Cook in 1999 in the debate with Peter Costello, supported the change; "Labor included this proposal prior to the last election therefore we have no difficulty supporting the proposal because it is our policy, it builds on the reform accomplished by Labor 15 years ago and it improves the current tax system faced by low income investors especially retired Australians", that's what your former boss said.
LEIGH: Kieran, when this was put in place two decades ago it's true that Labor supported it and the budget was strong at the time. The budget is anything but strong and this is a tax concession which then was about half a billion dollars a year and now is ten times that, about $5 billion. And it’s projected to grow to $8 billion a year.Read more
IS THE AUSTRALIAN ECONOMY TOO SIMPLE?
INSURANCE COUNCIL OF AUSTRALIA ANNUAL FORUM
WEDNESDAY, 7 MARCH 2018
It is a pleasure to be speaking at the Insurance Council’s annual forum today. As part of Labor’s economic team, I have appreciated my engagement with the ICA over recent years. You have a strong working relationship with Bill Shorten, Chris Bowen, Katy Gallagher, Matt Thistlethwaite, Jim Chalmers and others on the Labor front bench. Smart oppositions use the time to engage with the community, craft policies, and prepare for the possibility of taking government. Regardless of your politics, I doubt anyone would disagree that this Labor opposition has produced more carefully crafted policy proposals than any opposition in a quarter of a century. We don’t just want to win the next election: we want to have a clear plan for growth in the decades ahead.Read more
It's no wonder we're questioning the value of private healthcare
The Age, 5 March 2018
In 1976, the Fraser government created Medibank Private to provide competition to private health insurers. As Malcolm Fraser himself put it: ''Full and open competition between Medibank and the private funds … will do much to cut down the total cost of healthcare.''Read more
LABOR COMMITS TO TIME USE SURVEY
A Shorten Labor Government will deliver the evidence-base to help us better understand how government policies impact women.
A Labor Government will provide $15.2 million in funding to the Australian Bureau of Statistics to conduct the Time Use Survey in 2020 and 2027.Read more